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Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: blake_paterson who wrote (70421)	4/17/2001 10:48:16 PM
From: Don Green	Respond to of 93625

Stabilizing Intel CPU Shipments Raise PC Recovery Hopes By DONNA FUSCALDO Of DOW JONES NEWSWIRES April 17, 2001 NEW YORK -- Intel Corp.'s (INTC) comments that microprocessor shipments stabilized in the first quarter were interpreted by some analysts and many investors to mean that the worst is behind the chip maker. The most important thing for Intel is its CPU business, so if that business has stabilized, it is "step one to a recovery," said Jack Geraghty, an analyst at Gerard Klauer Mattison. While Intel may have been "coy" by saying it expects regular seasonal patterns for its CPU business, if one reads between the lines, that means "business gets better, folks," said the analyst. After the close of regular trading Tuesday, Intel, Santa Clara, Calif., posted first-quarter earnings that beat reduced expectations by a penny. While the company said second-quarter gross margins will be lower than in the first quarter, Intel noted that microprocessor shipments stabilized in the just-ended quarter. The news sent Intel's stock up to $29.00 in after-hours trading, according to Reuters Instinet. Shares of Intel finished the regular trading session at $26.04. Eric Rothdeutsch, an analyst at Robertson Stephens, said that Intel's CPU comments probably indicate that the worst is behind the chip maker, but he added that the next couple of quarters will still be challenging. He pointed to Intel's gross-margin forecast as evidence of the tough time ahead. "Pricing is a problem, and the Pentium 4 ramp is also a problem," said Rothdeutsch, explaining that Intel still doesn't have a chipset for the Pentium 4 that works with dynamic random access memory other than Rambus Inc.'s (RMBS) chips. Rothdeutsch said Intel wasn't "stretching" in its assessment that CPU shipments are returning to more-regular patterns. "If you look back for the last ten years, the second half was always stronger, even when times are tough," he said. "To expect the second half to be better than the first half is in line with history." The analyst said he will cut his projections of Intel's results but will maintain his long-term rating of attractive on the chip maker's stock. But at least one analyst wasn't so optimistic about Intel's recovery prospects. While Drew Peck of S.G. Cowen admitted that "for those looking for a true gloom-and-doom scenario (Intel's microprocessor comments) may be a surprise," he questioned the disconnect between stabilizing shipments and Intel's deteriorating margins. "We've seen a precipitous decline in the company's margins, and it doesn't look like it will recover," he said. Peck, who had forecasted second-quarter gross margins of 53%, said that based on Intel's comments on microprocessor shipments, investors may think things won't get worse. The reality, however, is that "these margins don't represent a low point in the (chip) cycle, but represent what is typical of the microprocessor business in the next five years," said Peck. Intel said Tuesday that gross margins in the second quarter would come in at 49%. In the first quarter, gross margins were 51.7%.

To: blake_paterson who wrote (70421)	4/18/2001 7:53:26 AM
From: gnuman	Read Replies (1) \| Respond to of 93625

Blake, re: So Gene...still no response from you on the RDRAM pricing, on the extrapolating $/MB to $/128Mb equiv....my best guess is that the "$18/Piece" quoted in the article is 1 Rimm...$18x4 = $72/128 Mb equiv. Any thoughts? In January Samsung was reported as shipping 30M RDRAM units since inception at a value of $900 million. The ASP for that period is $30.00. Samsung previously said sales in Rambus DRAMs amounted to 30 million units, valued at US$900 million. nikkeibp.asiabiztech.com On March 19 they stated Sales of RDRAM high-speed memory devices, widely used in both high-end workstations and high-performance games machines, have been very strong since the product's inception and that total revenues to-date have exceeded $1 billion. usa.samsungsemi.com It's clear to me the $18.00 refers to a 128Mb RDRAM chip. (You are also neglecting the Intel subsidy for RIMM's in your analysis). If you want to add 128MB PC600 to a Dell 8100 it's going to cost you $240.00. You know, there really is nothing harmful (to the longs or the shorts) in discussing assumptions, agreeing upon them and trying to complete a model which is transparent. Then we can all stop arguing opinion and horsesh@t and instead argue models (g). C'mon, you'll be glad you pitched in...there's nothing wrong with sharing knowledge...at least you can have a part in educating a mom'n'pop in the ways of you rocket scientists... Your spreadsheet model is a 1.3MB xls file. Analyzing the plethora of assumptions and data isn't a ten minute task. Considering the amount of time I spent analyzing and PM'ing inputs on previous models I'm somewhat offended by the implication. <G> JMO's